Tax Extenders Stalled in Senate

Senate Finance Chair Max Baucus (D-MT) worked this week to bring a package of expiring tax provisions to the Senate floor. Senator Baucus's so-called "extender" bill is expected to be a modified version of the House-passed Renewable Energy and Job Creation Act, H.R. 6049. The extenders, which have been stalled in Congress since last year, are likely to form the basis for the single major piece of tax legislation passed by Congress this year; therefore, many constituencies have a stake in enactment of the measure.

The House bill includes one-year extensions of several tax provisions affecting businesses and individuals, along with a number of energy-related tax incentives. H.R. 6049 would cost $54 billion over 10 years and is fully offset with taxes on offshore deferred compensation and a delay until 2019 of the worldwide interest allocation benefit. Provisions of interest to colleges and universities are extensions of the IRA charitable rollover and the above-the-line tuition deduction.

Senator Baucus intended for the extender package to be fully paid for in accordance with "pay as you go" budget rules. However, 41 Republican Senators (enough to sustain a filibuster) have gone on the record formally opposing any extender package that was offset, and on June 10 the Senate failed to invoke cloture on a motion to proceed to the House-passed tax extenders bill (H.R. 6049). In addition to the fully funded extenders, the Baucus measure included an unfunded, one-year alternative minimum tax (AMT) patch. The 50-44 vote was 10 votes short of the 60 needed to end a filibuster. Senator Baucus will continue to try to pave the way for Senate floor consideration of the extenders bill.

Reportedly, there remains support in both the Senate and House tax-writing committees for simplification of the tax treatment of employer-provided cell phones. While it is likely that the Senate extenders bill will now be considerably scaled back, it could still serve as a vehicle for moving the cell phone provision forward. NACUBO and other higher education associations, employer groups, and cellular service providers continue to work for inclusion of the measure in the Senate bill. It is expected that an extender bill will be enacted this year; however, it is unclear at this point what the next steps will be.